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Japan's Top Banks See Profits Tumble

Profit at Japan's biggest banks falls, while in Cambodia, a multi-million dollar tourism project is underway. VOA's Heda Bayron in Hong Kong reports regional business news, written by Chen Li.

Japan's top two banks saw their profit drop in the three months ending in June.

Japan's largest bank by assets, Mitsubishi UFJ Financial Group, says earnings for the quarter were $1.27 billion. This was a fall of 31 percent from the same period a year ago.

Mizuho Financial Group, the country's second biggest bank, says its profit dropped by about half in that same period, to $977 million. The company says the decline was due a fall in interest income, fees and commissions.

But British bank HSBC says strong demand for banking services, combined with investments in China, led to a profit increase for its Asia-Pacific unit in the first half of this year.

That unit, the Hong Kong and Shanghai Banking Corporation, says profit for the first six months jumped 57 percent, to nearly $4 billion.

Hong Kong and the rest of the Asia-Pacific contributed to nearly half of HSBC group's profit for the period.

"As the number-one international bank in Asia and number-one in Hong Kong, we have distinct advantages and opportunities," said Michael Geoghegan, HSBC's group executive officer. "We are increasingly managing a Hong Kong and mainland China business as a whole as economic integration in China continues."

Cambodia's government has given permission to two Cambodian and four foreign companies to develop tourist resorts on islands off the country's southern coast (near Sihanoukville and Kampot). The investments could reach up to $627 million. The companies would be able to lease areas on the islands for 99 years. Tourism brings in more than $1 billion a year to Cambodia's economy.

Japan and Australia say they have reached an agreement on a new tax treaty that is expected to help stimulate trade and investment.

Australian Treasurer Peter Costello says the agreement would significantly reduce withholding taxes on company dividends, interest and royalties paid between the two countries.